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Mothercare issues profit warning

Mothercare has warned its profits would be below expectations after the snow impacted its third quarter like-for-likes by around 4%.

In the third quarter to January 1, UK like-for-likes were down 5.8% or 3.7% including VAT. Total UK sales were down 1.9%.

The mother and baby retailer’s international business remained strong, with international franchisee retail sales up 17.6% for the period. Total group sales were up 0.4%.

Mothercare chief executive Ben Gordon said: “In the UK, after a strong start to the quarter, sales were impacted significantly by the adverse winter weather conditions which caused widespread disruption, particularly in our out of town stores. Direct deliveries were also affected and we cut off Christmas orders early to ensure that our customers received their deliveries on time.

“We estimate that the weather disruption has reduced UK like-for-like sales in the third quarter by approximately 4%, with toy sales particularly affected, and as a result full year UK gross margin will be 1% lower than previous guidance. Whilst this will be partly offset by cost savings, including a significant reduction in the share based payments charge, we expect group underlying profit before taxation for the full year to be below current market expectations.”

In its year to date performance, UK like-for-likes were down 4.5% or 2.9% including VAT. International franchisee retail sales were up 17.4%. Total group sales were up 1.7%.

Gordon said: “Whilst international continues to grow rapidly, we are planning cautiously in the UK where the consumer environment remains difficult.”

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